Sergey Drobyshevsky, Senior Researcher at the Gaidar Institute, in a commentary for RBC explained why prices for investment goods and services are rising faster than expected and assessed the impact of the key rate on investment activity.
According to the expert, the VAT increase played a significant role in price growth, but this factor alone cannot explain the entire trend. Detailed data on the structure of investment inflation is needed to draw more accurate conclusions. Sanctions, shortages of certain types of products, and other structural factors may also have influenced the cost of investment goods.
Sergey Drobyshevsky noted that high key rate primarily affects the cost of borrowed funds and reduces demand for investment, rather than leading to higher prices for investment goods. That said, investment inflation can be slowed either by reducing demand or by increasing supply; however, the latter option requires significantly more time and depends on both the availability of components and business expectations.
“The current decline in investment will undoubtedly have a negative impact on GDP growth rates in the coming years. However, the 2023–2024 experience shows that a revival in investment activity and production expansion can be achieved fairly quickly if business expectations change and companies gain confidence in future demand for their products. Therefore, a return to real investment growth is possible at any time and, in my view, is not critically dependent on the level of the key rate,” noted Sergey Drobyshevsky.